Financing and Mortgages in the US

Financing and Mortgages

During the financial crisis in 2008 and the years following, financing for foreign nationals was hard to come by. Over the last two years, however, banks have significantly loosened their restrictions on financing and begun lending again to many international buyers again.
Qualified foreign buyers can generally obtain financing for properties with a 30% down payment – though certain properties require a 40% down payment.

Banks are happy to offer mortgages to foreign buyers, but they usually require a relationship with the customer that goes beyond just the mortgage. Some banks, such as HSBC (which does a great deal of foreign homebuyer financing) have a requirement that the buyer hold a $100,000 deposit with their bank. Banks often also want to see proof of 12 months’ reserves to cover mortgage payment, maintenance, and taxes, in addition to the $100,000 mentioned above.

Kenton Hopkins, David McHugh and Benjamin Finn have relationships with all of the major mortgage banks, and we can help you find a lender and mortgage terms that best suit your needs. Please get in touch if you’d like more specifics on various financing options.
Then again, you may not need financing – in 2012, the NAR reports that 62% of completed deals involving foreign buyers were all-cash

Verification Documents
International buyers will usually be asked to provide the following documents, so it’s a good idea to get them in order ahead of time
Credit References.
Usually at least four references from credit sources will be required for mortgage loan applications. These documents must come from finance professionals such as accountants, bankers, or insurance officials. This is very important – in 2012, US realtors reported that most of the deals that fell through with foreign buyers did so because the buyers lacked adequate credit history.

Proper Visa or Foreign Passport Copy
Double check to make sure these documents haven’t expired and aren’t expiring anytime soon.
Verification of Rent/Mortgage Payments.
Proof of rent or mortgage payments are generally required for a period of at least one year before the application.
Proof of Employment
International buyers, just like US buyers, will be asked to verify their employment when applying for a mortgage.

Adequate Closing Funds
You will need to show that you can afford the purchase, as well as have funds on reserve to cover the full first year of payments, insurance costs, taxes, etc.

Every US lender requires borrowers to purchase homeowners insurance to protect the home from any potential damage and natural disasters. Insurance costs vary based on the size of the property and location of the property within the Vail Valley.